French-speaking West Africa’s largest economy

Ivory Coast

Ivory Coast’s economy will expand by 7.9 percent this year and by an average of 7.6 percent in 2016 and 2017, the International Monetary Fund (IMF) said in a mission report issued on Monday.

Ivory Coast, the world’s top cocoa grower and French-speaking West Africa’s largest economy, has seen a revival since the end of a decade-long crisis in 2011. But the IMF forecasts were below the government’s own growth targets of 9.4 percent in 2015 and double-digit growth in the coming years.

“While the staff recognises that a post-election end to the wait-and-see attitude of some private investors could push growth rates above its estimate in 2016, the mission felt that this factor is too uncertain to be incorporated in the baseline scenario,” the report said, referring to an October presidential election which President Alassane Ouattara is tipped to win.

Under Ouattara’s stewardship, the government has carried out a large-scale infrastructure makeover aimed at attracting private sector investors and spurring on economic growth.

Increased borrowing has covered much of the investment spending, which has included a costly rehabilitation of the power sector. Ivory Coast issued two Eurobonds in 2014 and 2015 for a total of $1.75 billion.

Public debt will hover around 43 percent of GDP over the medium term, the IMF forecast, while the cost of servicing the debt would increase to 13 percent of total revenues this year, up from 10.8 percent in 2014.

Ivorian authorities have said they plan to continue the policy of infrastructure investments.

In a letter of intent that was part of its application for the extension of its programme with the IMF, the government said it planned to increase investment spending to 18.6 percent of GDP this year from 16.1 percent in 2014.

However, the IMF report said the government had agreed to trim that amount after it under-executed investment spending budgeted for last year.

Meanwhile an inflation rate of 2 percent is expected this year, and the IMF projected a current account deficit of 2.6 percent of GDP over the medium term.

While the macro-economic outlook is positive overall, risks include poor weather that could affect agricultural output and power production as well as the potential continuation of recently discovered extra-budgetary spending, the report said.

“On the external front, tighter global financial conditions may complicate the financing of the large public investment programme.”

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